Paris/Geneva: Air France unveiled a management reorganisation as part of broader efforts to return to profit, as a key rival underscored the industry’s problems with a warning that a sustained recovery may not arrive for six years.

Air France, the French network of Franco-Dutch group Air France-KLM, said it would restructure itself into eight businesses starting from January 1, 2013.

No new jobs cuts were announced as a result of the overhaul, which is designed to support an existing restructuring plan calling for 5,000 lay-offs company-wide. Air France-KLM shares rose 2.8 per cent earlier in anticipation of the latest organisational moves.

The rejig came as British Airways (BA), part of International Airlines Group which also owns Spain’s Iberia, gave a downbeat assessment of prospects for a recovery from the recession gripping European airlines.

“We were too optimistic about economic recovery and adding capacity beyond sustainable levels, and that was buoyed by over-exuberant financing,” BA chief executive Keith Williams said, referring to the European industry as a whole.

“We failed to bring our costs in line with new market entrants and we’ve struggled to keep pace with them. There are welcome signs of a returning sense of discipline and also a realism to the challenges we face ahead,” he said the British-Swiss Chamber of Commerce in Geneva.

Williams recalled writing to colleagues in 2009 predicting that BA was unlikely to recover its record 2008 margin for a lengthy period.

“I said it would be 2018 before we saw a real recovery. Now events have shown that that was not unduly pessimistic,” he said in the remarks delivered on Monday.

At Air France, a three-year restructuring plan dubbed ‘Transform 2015’ aims to reduce operating costs by ₤2 billion (Dh9.5 billion) with the proceeds going to pay down debt.

The shake-up includes an overhaul of the main passenger business into three units: long-haul, medium-haul at Paris Charles de Gaulle and the operations of the French capital’s second airport Orly together with France’s regional airports.

Each unit will control its own costs and take care of each stage of a passenger’s trip, the airline said in a statement.

Air France, which has suffered a number of strikes in recent months, said it would present the plans to unions in December.

Global airlines association IATA this month projected a wider than previously expected loss of $1.2 billion (Dh4.4 billion) for European carriers in 2012, despite hiking its global outlook.